New Jersey couples who have decided to dissolve their marriage will need to negotiate a divorce settlement and divide their assets and debts. If they cannot reach an agreement, they can have the court decide for them. In court, the couple’s assets and debts will be divided using the principle of equitable distribution.
What is equitable distribution?
Equitable distribution is a method of dividing property in a manner that is fair to both spouses, depending on a variety of factors, including their individual contributions to the marriage. Equitable does not mean equal, although in some cases a court might find that due to the couple’s situation, the fair division is an equal one. Under equitable distribution, certain conditions apply, including:
- Both assets and debts are divided in a fair manner
- Property is treated as marital and separate property
- Marital property is any property that the couple acquired during their marriage
- Separate property generally includes the property individually acquired by each spouse before marriage and any individual gifts or inheritances received during the marriage
What factors affect how property is divided during equitable distribution?
To decide how to divide the couple’s assets and debts, the court will consider a variety of factors. These include each person’s age and health, each person’s earning capability, each person’s history of spending and their financial requirements and finally, the reason why the couple decided to end their marriage. The court might also look at the roles each person played in their marriage, including if one spouse worked while the other stayed at home to take care of the family.
Equitable distribution is designed to create a just and balanced division of the couple’s assets and debts. This can help each spouse plan for their post-divorce life.